JIT refers to “just in time” production system or “Zero Inventory” system. i.e. producing or procuring just enough parts or material only when they are needed.

This technique was made famous by Toyota Motor Company.

The prime objective of JIT is elimination of waste

Cause under this the

products are assembled just before they are sold,

subassemblies are made just before assemblies are needed,

parts are fabricated just before subassemblies are needed

This not only reduces the inventory carrying cost but also leads to elimination of waste & improved quality thereby increasing the overall productivity.

How it leads to elimination of waste?

In JIT each operation is synchronized with those subsequent to it. We can’t afford to reject a part at any stage because all the subsequent operations will be affected. Therefore every part produced has to be of good quality.

JIT requires not only “Zero inventory” but also “Zero Defect” & “Do it right the first time” policies.

7 types of waste-: Waste of….

Defective parts, overproduction, transportation, motion,

Waiting, processing, stocking

KANBAN

Kanban is a Japanese term which means “a card carrying request for production or withdrawal of parts”.

It is used with JIT. It is a simple information system for controlling production.

Parts are never produced until the kanban is received i.e. just before when they are actually needed.

Production is automatically controlled even if there is variation in demand.

Thus production is “PULLED” by “Demand Requirements” rather than being

“PUSHED” by “Inventory building Requirements”.

MRP VS JIT ……

MRP = Push system

JIT = Pull system

ie in MRP material is pushed into production to meet future needs

while in JIT material is pulled through production to meet current needs

MRP is based on forecast & planning is a bit complex

Planning in JIT is easy as one needs to plan only a smoothened production flow

MRP involves lot sizes at all levels of the product & is capable of taking sudden variations in demand and supply

JIT is a single unit production & is not capable of taking large & sudden variations

In MRP there is not much stress on vendor relations while it is an important element of JIT

MRP = suitable for Job or Batch production

JIT = suitable for Mass or Flow production

MRP

MRP is the technique for converting the master production schedule for end products into a detailed schedule for dependent demand items i.e raw materials & components which make up the final product

It deals in determining….

What components are needed

How many are needed

When they are needed

& When they should be ordered to meet the requirements on time

The purpose of MRP is to ensure that all the required material and components are available at right time and in right quantity.

2 -> What components are required to make it & how many ( ‘explodes’ the end item

requirement into component requirements)

3 -> How many are already available

4 -> When to order & how much to order

(eg. if we are making a stool, we require 4 legs and 1 seat for each stool. Now if the demand for stool is 5 for the next month we require 16 legs & 5 seats. Also if 6 legs are already available then we need to order only 10)

Loading – Assigning specific jobs to each work center

Sequencing – Determining the order of processing of all jobs at each work center

Scheduling – Establishing start and finish times of all jobs at each work center

Dispatching – Releasing orders and instructions according to the production plan

In this system order quantity is fixed but time interval of ordering varies depending on demand

In this system ordering interval is fixed but ordering quantity vary with changes in demand

Selective Inventory Control

ABC analysis

ABC analysis is an inventory control tool in which we divide the inventory items into 3 groups on the basis of their Annual Rupee Usage

(ie on the basis of “ monetary value of the total annual consumption ” of different items.)

(ie total quantity consumed in a year * unit cost of item)

A class items are the high value items which constitute about 10% of the total no. of items but account for about 70% of the total money spent on inventories.

These items require rigid control & should be ordered more frequently in less quantity in order to reduce the capital locked up at any time.

B class items are the middle level items which do not require as much close control as A class items and represent about 20% of the total items as well as 20% of the total expenditure on items.

C class items are the low valued items which constitute about 70% of the total quantity but account for only about 10% of the total expenditure. These items require less control & should be ordered less frequently & in large quantities in order to reduce paper work & take advantage of quantity discount.

- Based on Pareto principle

- -Reason for using ABC analysis is that inventory of any organization consists of thousands of items& it is not possible to pay equal attention to each & every one of them. ABC analysis therefore enables the management to concentrate efforts on items which are of critical importance.

Vital – without which production will come to halt ; Essential – reduced efficiency or performance

ERP

Enterprise Resource Planning is the process of integrating all the departments and their functions in any organization such as finance accounting, human resource management, production & material management.

Under this we create a single software program which can be used by every department and it uses a common database. So that it provides a seamless flow of information in no time.

SIX SIGMA

6 sigma is a quality improvement program with a goal to reduce the no. of defects to as low as 3.4 parts per million.

It makes use of Normal Distribution to predict defective rates.

Six Sigma quality is a benchmark of excellence for product & process quality popularized by Motorola.

Here Sigma i.e. Standard Deviation is used to designate the spread of any process about the mean or average. And the value indicates how well the process is performing. The higher is this value the better is the process.

A product is said to be of six sigma quality if there are not more than 3.4 million defects per million.

6Si Vs TQM – 6S is a quantitative tool. It actually measures the output of the processes.

GROUP TECHNOLOGY

GT is a manufacturing philosophy in which similar parts are identified & grouped together to take advantage of their similarities in design attributes or manufacturing processes.

(similarities in..

design attributes = geometric shape & size

manuf. attributes = processing steps required )

In group layout different machines are arranged in groups or “cells” such that each cell is capable of carrying out all the operations required in a family of product.

This helps in reducing …

Material handling time and cost

Setup time

WIP inventory

Used in Batch production systems

CONCURRENT ENGINEERING

CE may be defined as an improved product development practice in which various phases of product development move concurrently or in parallel rather than sequentially.

It helps in….

reducing product development time & cost

& achieve higher quality

It is based on cross functional team approach & bring together people from several functional areas so that they start interacting from the beginning itself perform their task in parallel.

Phases-

Conceptual design Detailed design Prototyping & testing

Preproduction & process planning manufacturing marketing

Value analysis- value analysis involves the examination of the function of a product or service relative to its price in order to provide

A business practice characterized by the endless pursuit of waste elimination. A manufacturer that is lean uses the minimum amount of manpower, materials, money, machines, space etc. to get the job done on time.

LEAN ENTERPRISE: A Lean Enterprise is an organization that is engaged in the endless pursuit of waste elimination. A Lean Enterprise has a culture that does not tolerate waste of any kind

Flexible Manufacturing System (FMS)

An integrated manufacturing capability to produce small numbers of a great variety of items at low unit cost; an FMS is also characterized by low changeover time and rapid response time.

A Flexible Manufacturing System is capable of processing a variety of jobs simultaneously.

It generally consists of a group of processing stations (usually CNC machines); interconnected by means of an automated handling and storage system and controlled by an integrated computer system.

It repetitively considers exchange between location until no further cost reduction is possible

Characteristic

JOB

Production

BATCH Production
MASS Production
PROCESS or flow Production

Layout

Functional or Fixed layout
Functional or Group layout
Line
The entire factory is designed like one huge machine to produce a specific product at certain rate

Machineries Equipments & Material handling devices

General purpose
General purpose with some special purpose equipment
Machineries and equipments designed for specific product
The entire ‘factory’ is completely integrated at all stage and generally there are no isolated equipments

WIP

High
High
Less
NO WIP between operation stages

Material management

MRP
MRP
JIT
JIT

Job Evaluation = process of determining the worth of any job depending on factors

such as- skills, effort, responsibility demanded by the job (worth in

monetary terms)

Methods -:

Job Ranking - jobs are ranked in terms of their importance

Job Classification - jobs allocated to predefined categories

Point Rating - weightage points are assigned to various factors required by the job

Sales Force Estimates –Aggregate of estimates given by sales personnel

Customer survey – opinions collected from prospective buyers

Executive opinion – opinion of experts is sought

Delphi method – a panel of experts is asked a set of questions and the response

to one questionnaire is used to produce the next questionnaire. It is an

iterative process and continued until a consensus is reached.

II. Objective techniques

1. Time Series Methods

i. Moving Average

ii. Weighted Moving Average

iii. Exponential Smoothing method

2. Causal Methods

i. Regression and Correlation analysis

Time Series model

Time series is just a collection of past values of the variable to be forecasted

Identifies the historical pattern of the event and project or extrapolates it into future

Causal Model

It tries to establish cause and effect relationship between the event and some related parameter. Eg demand for cement can be related to growth of construction industry

demand for cold drinks can be related to change in temperature

In time series we consider the data with respect to time only whereas in causal methods we consider the data with respect to some other variable

Regression analysis or Least square method –

Regression analysis establishes a relationship between variables.

(fit a straight line to a given scatter)

Eg simple linear regression model gives a linear equation of the form y = a +bx

Correlation analysis – determines the degree of closeness of the relationship between two variables.

(correlation can be explained in terms of correlation coefficient, which is a number varying between –1 to +1. If y increases with increase of x, then it is positive and if y decreases with increase x, then it is negative. If the correlation coefficient is 1, then all the values of x and y are perfectly correlated and we would expect all the values to lie on regression line. If the value is zero then there is no relationship between x and y. (Higher the value of coefficient, higher the linearity between x and y))

Time series model

Simple Average – useless

Moving Average – Fresh avg calculated at the end of each period by adding the most

Japanese term for “continuous improvement” & signifies a never ending pursuit for improving the processes by reducing costs, reducing delivery time, improving quality, creating a better workplace, better products & greater value to the society.

Jig – Guide the tool as well as clamp the workpiece

Fixture – Only clamp the workpiece

Break Even Point – is that point (on cost vs quantity graph) at which sales income equals the total cost ie at which profit is zero.

Software maintenance –

Corrective

Preventive

Adaptive

Business Process Reengineering – The fundamental rethinking and radical redsigning of the existing business process

Pokayoke: Japanese term for 'mistake-proofing'. These are the mistake-proofing and fool-proofing devices made by designing parts, processes, or procedures so that no mistake can take place.

Baka-yoke - a manufacturing technique of preventing mistakes by designing the manufacturing process, equipment, and tools so that an operation literally cannot be performed incorrectly; the term "poka-yoke" is sometimes referred to as a system where only a warning is provided.

COUNTERCLOCKWISE FLOW: A basic principle of Lean manufacturing cell layout is that the flow of material and the motion of people should be from right to left, or counterclockwise. The origin of this idea came from the design of lathes and machine tools with the chucks on the left side, making it easier for right-handed people to load from right to left

CHAKU-CHAKU LINE: A production line where the only human activity is to 'chaku' or 'load' the machines. The machines eject the finished parts automatically using hanedashi, so that the operators do not have to wait.